Marina Lyubimova
⬤ Gold futures extended their gains by more than $100 per ounce, pushing prices above the $4,100 mark as investors rushed into safe-haven assets. Gold traded at $4,113.80, up $104 or 2.59%, marking one of the strongest intraday moves in recent weeks. The rally came as markets reacted to reports that the US government was close to reaching an agreement to reopen. Investors, anticipating expanded federal spending, turned to gold as a hedge against long-term financial instability.
⬤ The discussion around fiscal policy has grown more urgent as policymakers consider tax and spending adjustments tied to the reopening. Potential reforms to corporate tax rules, capital-gains treatment, and debt-funding mechanisms could raise costs for financial institutions and debt-heavy sectors. This increases bankruptcy risk for smaller firms facing higher tax pressure. Meanwhile, greater fiscal burdens may drive talent away from the financial industry toward more tax-friendly jurisdictions. These policy uncertainties have boosted demand for defensive assets like gold.
⬤ The move reflects deeper concerns about US fiscal sustainability. Reports suggest the US debt could approach $40 trillion, fueling worries about long-term stability and driving more investors into precious metals. The combination of rapid debt growth and political uncertainty has strengthened gold's appeal as a global hedge.
⬤ With gold's rally gaining momentum, market attention has shifted to price forecasts and futures outlooks. If US borrowing expands as expected, gold may continue attracting inflows as investors seek protection from mounting fiscal risks and macroeconomic volatility.
Marina Lyubimova
